Even though the federal-revenues-per-pupil control variable captures some of the variation in spending due to the share of disabled children in a given district, it is possible that the variable will not capture all the additional expenditures necessitated by the presence of these students. This outcome is in fact quite plausible, since the IDEA explicitly forbids districts from considering the cost of special education services in its decisions regarding which sorts of services to offer a student (even though actual federal funding to the states under the IDEA is itself limited). So, if expensive-to-educate disabled students happen to be more heavily concentrated in either small or large districts, their presence could bias the model’s estimate of the effect of district size on spending.

To control for any such unaccounted-for variation in mandated special education spending, the model includes the percentage of special education students in each district as a separate control variable.